Goldman Sachs has done the math and a national mask mandate to halt the spread of coronavirus would have a big impact on the U.S. economy [MarketWatch]
A team of economists lead by Jan Hatzius, chief economist at Goldman, makes the case that a national face-mask mandate could partially substitute for renewed lockdowns, as COVID-19 inflections flare up in a number of southern and western states in the U.S., that would “otherwise subtract 5% from gross domestic product….” Their data showed that countries that fail to reach widespread masking usage see both infections and deaths increased….
CBO Sees Double-Digit Jobless Rate Through 2020, GDP to Shrink 5.9% [WSJ]
The CBO estimates the jobless rate will end the year at 10.5%, lower than its earlier forecast of 11.5%. Nevertheless, it is likely to remain above the pre-coronavirus pandemic level of about 3.5% through the end of the decade…. The bounceback will likely be followed by a long, slow recovery similar to the pace of the previous decadelong economic expansion, when growth averaged around 2% a year, the CBO said. Unemployment is expected to average 6.1 percent a year through 2030.
Uber agrees to buy food-delivery service Postmates for $2.65 billion in stock [CNBC]
The deal brings together the fourth-largest U.S. food delivery service with Uber Eats, which trails only DoorDash in market share, according to Second Measure and Edison Trends. The companies said Uber intends to keep the Postmates app running separately, “supported by a more efficient, combined merchant and delivery network….”
Uber previously was in the running to buy rival food delivery service GrubHub, but talks broke down as the companies could not agree on a break-up fee, and the ride-sharing company grew frustrated with what it perceived as stalling tactics….
Commerzbank Leaders Toppled in Cerberus-Led Investor Revolt [Bloomberg]
Chief Executive Officer Martin Zielke, in the job for just over four years, has offered to resign, though the bank’s supervisory board still has to accept his resignation and set a date, Commerzbank said late Friday. Chairman Stefan Schmittmann will leave Aug. 3…. Cerberus, which unsuccessfully pushed for two board seats, has led an investor revolt at Commerzbank, criticizing the supervisory board and management for being too timid in cutting costs. But the resignation of both the chairman and the CEO suggests that the German government -- the bank’s largest shareholder -- has also lost patience.
Multi-strategy hedge funds post double-digit gains [FT]
Chicago-based Citadel, which has close to $30bn in assets under management, gained 1.7 per cent in June in its flagship Wellington fund and is up 13.3 per cent year to date…. Millennium Management, with $42bn in assets, gained 2.9 per cent in June and is up 10 per cent in the first six months of the year…. Balyasny, which manages about $6.8bn in assets, saw a 2.5 per cent increase in its Atlas Enhanced fund last month, taking gains this year to about 15 per cent…. Meanwhile, Steve Cohen’s Point72 Asset Management gained 1 per cent in June and is up 3.9 per cent year to date….
Hedge fund launches seize up in tough markets [FT]
Just 84 hedge funds launched in the first three months of this year, according to data firm HFR — the lowest quarterly total since the depths of the financial crisis in late 2008. Meanwhile, 304 funds were liquidated, which was the second-longest casualty list since the crisis…. Peter Greene, vice-chair of law firm Lowenstein Sandler’s investment management group, said that while some debuts might have been delayed because of the pandemic, he did not expect the market for “well-pedigreed managers” to be affected by coronavirus.
Apollo Launches Platform to Make Big Loans [WSJ]
The New York firm is creating a $12 billion platform focused on providing companies with loans of around $1 billion, Apollo officials said…. Apollo, which already had $24.5 billion dedicated to direct lending as of March, has taken full advantage. But so far its direct-lending business has primarily focused on making smaller loans to midsize companies.
Share The Wealth As We Recover Health [Ray Dalio/Noema]
With the present COVID-related government interventions of massive bailouts and Fed commitments to purchase securities, we’re far across the line of what is normal…. We’ve got to move fast in the political realm because the time is now. New systems are being put in place as we speak….
[Universal basic income] an odd duck that is neither capitalist nor socialist. And the fact that you can’t so easily label it is one of its more appealing aspects.
Trump claims only he can keep your portfolio afloat, but JPMorgan says a Biden win would be neutral to positive for stocks [MarketWatch]
The Democrat’s major economic policies include lifting the corporate tax rate from 21% to 28% — partially reversing the Republican corporate tax cut of 2017 — and increasing the federal minimum wage. The investment bank’s U.S. equity strategy team also says it expects the former vice president to ease tariffs on China and increase infrastructure spending….
The team’s Democratic agenda outperformers — though it stressed the agenda remains fluid — include Tesla and Nikola, both benefiting from spending on alternative energy and green technologies. Biden’s health-care agenda puts Johnson & Johnson, CVS and others in the outperforming basket, while tariff de-escalation sees Procter & Gamble, Nike, Boeing, 3M and DuPont feature.
A Trump-Backed Senate Candidate’s Hedge Fund Disaster [NYT]
A little more than a decade ago, after departing from Auburn University where he was head coach, Mr. Tuberville entered into a 50-50 partnership with a former Lehman Brothers broker named John David Stroud. Their ventures, which included TS Capital Management and TS Capital Partners — T for Tuberville and S for Stroud — turned out to be a financial fraud. Mr. Stroud was sentenced to 10 years in prison, and Mr. Tuberville was sued by investors, who accused him of fraud and violating his fiduciary duty to take care of their investments; he reached a private settlement in 2013…. While he was not picking stocks, or even a frequent presence in the office, Mr. Tuberville made introductions to potential investors, had business cards identifying himself as managing partner, and leased a BMW and got his health insurance through the company…. While the terms of the settlement have not been made public, Mr. Tuberville’s losses from the venture are estimated to have exceeded $2 million, including his legal bills, $450,000 in investment losses and the settlement payout, according to a person with knowledge of the details.
A Beverly Hills Hotel, Bought With Looted Money, Goes on Sale [NYT]
The hotel — the last of [Jho] Low’s marquee properties to be sold by federal authorities — is being auctioned off, with proceeds to be split between the governments of Malaysia and the United States…. Federal authorities in Los Angeles and Washington are hoping to sell it for well north of $100 million in an auction this summer, according to people briefed on the matter.